Realtors ask Hilton Head to drop tax increase proposal

A group of Realtors has called on the Town of Hilton Head Island to cut spending and drop a proposed 6.67 percent tax increase.

Town Council is considering a millage-rate increase for next fiscal year, from 18.54 to 19.35. A home valued at $350,000 would be taxed an additional $11.34 a year.

Supporters of the increase say more money is needed to pay for community priorities, such as improving the island's tourist and recreational areas. Realtors who oppose it say increasing taxes won't help a beleaguered real estate market, and the town should cut spending while also redeveloping the island.

Mayor Drew Laughlin favors a tax increase and points to many comments during the fall mayoral and council elections about the need to invest in the island's economic development. The town has some preliminary plans, which come with a large price tag, he said.

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"If what you want is minimal, adequate service and spending for the least amount of money, we can do that. But if you want a substantial investment in the island's future -- if you want a redeveloped Coligny area, expanded rec center and senior center, and a rowing and sailing center -- there's no free lunch," Laughlin said. "Nobody likes taxes, but it's a question of what services you're expecting from the town."

The Hilton Head Area Association of Realtors takes a different view.

"Every business and citizen on Hilton Head Island has had to adjust and cut their budgets; the town needs to do the same," association president Karen Ryan wrote in an email. "Now is not the time to increase property taxes, but to gradually decrease spending over the next two years in preparation for the 2013 (property value) reassessments. ... Raising property taxes will not help us sell homes."

Some council members say they have heard people in the community complain that the town's budget has become bloated and its staff overpaid.

Next year's proposed budget includes a 1-percent merit raise for town employees. Pay was frozen in 2009 and increased 1 percent last year.

Although some residents criticize staff salaries that are higher than those for surrounding communities, Hilton Head officials say an apt comparison is difficult. They point to the island's higher cost of living and its larger population.

Town employees might have job titles similar to those in other communities, but that does not mean they perform the same duties or have the same education and experience, Hilton Head officials say.

A 2006-07 study by a town consultant indicated its salaries were not as competitive as other local and regional employers, both public and private.

Based on per capita cost of employees, Hilton Head's $534 ranks in the middle among the state's local governments. Greenville pays the most, at $758 per capita, and Mount Pleasant the least, at $422, the study said.

As for spending growth, general operating expenses increased from $31 million in 2008 to an estimated $32.15 million for the current fiscal year, which ends June 30.

The proposal would increase next year's operating budget 1.5 percent, or about $500,000, above a revised projection for this fiscal year.